Search takes bigger bite of advertising pie

As online advertising continues to grow in 2007, the biggest thing search marketers can expect is some serious competition.

The growth will be seen through the sheer number of advertisers participating in search and in the number and caliber of agencies getting involved in the field.

"Some of the biggest ad agency names are ready to participate, and will offer a full suite of complementary marketing services," said Ron Belanger, vice president of agency development at Yahoo Search Marketing, Boston. "We have already seen the tremendous strides that traditional agency names like Ogilvy, Carat and Starcom have made in search, and this trend will increase."

Basically, Mr. Belanger believes that, by the end of 2007, to be an agency will mean to have a search practice.

He also said that there's a growing trend toward online audience fragmentation. Consumers are adapting to new technology and will continue to diversify what they consume.

"Like any high demand medium, advertisers like diversity in quality sources," said Dave Hills, president and chief marketing officer for San Francisco-based LookSmart. "We believe this will accelerate over time, similar to what occurred in television between broadcast networks and cable networks."

He also said that publishers will want to own more of their advertiser relationships. Publishers want to have as many relationships as possible so they can control price and terms in order to maximize revenue.

In fact, maximizing revenue is on everyone's mind and this could sometimes lead to problems. As in any industry, there will always be people looking to defraud the system.

"All search companies and agencies must be committed to promoting a standard against which clicks are measured and counted including the identification of invalid clicks and/or fraudulent clicks," Mr. Hills said.

The only threat from Mr. Belanger's window is that search remains an underutilized vehicle.

"There are still millions of searches conducted by highly valued consumers in which there are no willing advertisers," he said.

Mr. Belanger said that social search is the biggest untapped opportunity for marketers.

For example, sites like Yahoo Answers offer a completely different set of results for the consumer to pull from. Social search offers up a tremendously powerful new strategy for the savvy marketer.

"While social search will be more difficult to have direct control over, its power will be great, adding a further complexity to search marketing," Mr. Belanger said. "Our usage numbers on Yahoo Answers show that consumers are finding these results relevant, and you're starting to see them on traditional SERPs, appearing in prime real estate areas."

The next year will see a further expansion in search, content, in-text, video search, local and mobile, said Chrysi Philalithes, vice president of global marketing and communications at search firm Miva, New York.

"In 2007, search marketers will have greater opportunities to reach the right user at the right place and time, with mobile and video search playing center stage," Ms. Philalithes said.